German businesses shifting investment preference to India over China

Kolkata: German companies looking for investments in the region are increasingly favouring India over China as an investment destination, as they view intellectual property rights (IPR) protection and a sound legal framework in India as a major advantage.

S Batra, managing director, Horizon GMBH, who is a member of a visiting German delegation told reporters that many German companies in China were facing problems due lo lack of IPR and some were planning to relocate. "India has an edge over China. It offers IPR protection and a stronger legal framework. Many German companies are planning to invest in India."

He also said China was known only for as a low-cost producer, with inferior quality, while India was a quality producer with moderate costs compared to the international level. "Companies that are looking at quality and not cheap products, are strongly considering India," Batra added.

According to him the German SME sector was also looking at India to set up second manufacturing facilities and joint ventures. He said his own company was keen to have an Indian JV.

Trade data showed that German companies operating in China were not only facing stagnation in growth, but also experiencing slowdown, while, trade with India had grown almost 50 per cent to €10 billion in 2006.